My review of Michael Lewis’ new book, The Big Short, is up on bookforum.com

Here’s a snippet:

The cast of characters in Lewis’s highly readable chronicle of the collapse (and what led to it) includes a misanthropic former medical resident, a money manager who saw himself as Spider-Man, and a pair of men in their thirties who started with $110,00 in a Schwab account they managed from a backyard shed in Berkeley, California. “Each filled a hole,” Lewis writes. “Each supplied a missing insight, an attitude to risk which, if more prevalent, might have prevented the catastrophe.”

Earlier this week I asked whether President Obama could order a lethal attack on former San Diego imam Anwar Awlaki.

The Washington Post’s Dana Priest has anwered that question today with a resounding yes:

After the Sept. 11 attacks, Bush gave the CIA, and later the military, authority to kill U.S. citizens abroad if strong evidence existed that an American was involved in organizing or carrying out terrorist actions against the United States or U.S. interests, military and intelligence officials said.

The evidence has to meet a certain, defined threshold. The person, for instance, has to pose “a continuing and imminent threat to U.S. persons and interests,” said one former intelligence official.

The Obama administration has adopted the same stance. If a U.S. citizen joins al-Qaeda, “it doesn’t really change anything from the standpoint of whether we can target them,” a senior administration official said. “They are then part of the enemy.”

Both the CIA and the JSOC maintain lists of individuals, called “High Value Targets” and “High Value Individuals,” whom they seek to kill or capture. The JSOC list includes three Americans, including Awlaki, whose name was added late last year. As of several months ago, the CIA list included three U.S. citizens, and an intelligence official said that Aulaqi’s name has now been added.

Awlaki corresponded with alleged Fort Hood shooter Maj. Nidal Hasan before the attack that killed 12 soldiers, and investigators believe he also met with accused “underwear bomber” Umar Farouk Abdulmutallab.

Ever since Awlaki’s December 2007 release from prison, U.S. counterterrorism officials have been warning us that he’s been involved in terrorism:

• February 2008: “There is good reason to believe Anwar Awlaki has been involved in very serious terrorist activities since leaving the United States, including plotting attacks against America and our allies,” an anonymous U.S. counterterrorism official tells The Washington Post.
• January 3, 2009: “Mr. Awlaki is a problem. He’s clearly a part of Al Qaida in Arabian Peninsula. He’s not just a cleric. He is in fact trying to instigate terrorism,” said John Brennan, deputy national security advisor for counterterrorism and homeland security.
• January 20, 2009: The Senate Foreign Relations Committee reports “Although Awlaki has not yet been accused of a crime, U.S. intelligence and military officials consider him to be a direct threat to U.S. interests.”

(See my Awlaki timeline for more)

A reason that Awlaki hasn’t been blasted to smithereens already is due to the fact that he is a U.S. citizen, born in New Mexico while his father, a former Yemeni government minister, was there on a diplomatic posting.

Slate’s Glenn Greenwald notes that being accused of being a terrorist is not the same thing as actually being a terrorist.

Lots of heat on Awlaki now, probably coming out the House Intelligence Committee:

The radical Yemeni-based cleric connected to two violent plots in the U.S. has “gone operational,” a senior U.S. official told Fox News.

The Nigerian accused of trying to blow up a Detroit-bound airliner had his suicide mission personally blessed in Yemen by Anwar al-Awlaki, the same Muslim imam suspected of radicalizing the Fort Hood shooting suspect, a U.S. intelligence source has told The Washington Times. 

“It appears that just like with Major Hasan, Awlaki played a role in this,” said Rep. Pete Hoekstra, R-Mich, ranking minority member of the House Intelligence Committee tells ABC News.

“And the mujahideen brothers in the Manufacturing Sector possessed a highly advanced device, with Allah’s grace, and it was tested and proved to be successful and practical, and it passed the inspection machines. Brother Omar has reached his target, with Allah’s grace, but, fate from Allah, a technical error happened and led to an incomplete detonation, and we will continue the path, Allah-permitting, until we reach what we want, and make faith all due to Allah.”

Poor tradecraft is, fortunately, a persistent problem for the jihadis as Michael Kenney notes in Organizational Learning and Islamic Militancy (May 2009), a study written for the U.S. Department of Justice. (.pdf)

“Indeed, mistakes and poor tradecraft are common in terrorist operations.  One of the most significant findings to emerge from this research regards Islamic terrorists’ propensity towards the poor tradecraft and operational errors.  In the cases examined in this study operatives committed a range of basic mistakes.  Militants forgot code words and aliases, resulting in miscommunication with their colleagues.  They foolishly tried to  run away from law enforcement officers or became visibly upset when questioned.  They received speeding tickets and other traffic citations when operating undercover in “enemy territory.  They provided incriminating hints of their looming attacks to people outside their conspiracies.  They took advanced aviation classes and expressed their desire to only learn how to steer, not land, large commercial aircraft.  They traveled together, not separately, when assembling for attacks.  They dressed and acted in ways that made them stand out more, not less.  They used matches instead of lighters to ignite bomb fuses.  They didn’t change their cell phones and SIM cards, even when under immense counter-terrorism pressure.  The list goes on.”

According to Kenney, what explains this is:

1. Experience in guerrilla warfare does not translate particularly well to urban terrorism
2. It is difficult to gain experience when the attack gets you killed.
3. The war on terror hampers training and planning.
4. Ideological or religious “certitude” that they don’t need to be careful because their fate is already determined by Allah

Hugo Chavez, Venezuela’s president, is treated in the American media as the political equivalent of Ronald McDonald.

If he’s mentioned, and he rarely is, it’s as a clownish boor. He attracted attention in 2006 when he called Bush a “devil” before the UN General Assembly.  Or in 2007 when Spanish King Juan Carlos told him to “shut up.”

But oil prices have tumbled and Chavez is no fool, as the Wall Street Journal shrewdly notes today on its back pages.

In the “Heard on the Street” column, John Lyons points out that fears that Chavez will nationalize Venezuela’s banks are overblown and Venezeula’s dollar-denominated bonds may rate a “buy.”

In fact, President Chavez has recently been loosening some terms for the international oil majors operating in the country in an apparent sign of the government’s need to keep attracting foreign capital.

(In my paper edition, the headline is “Venezuela’s Bank Nationalization Fears Are Overblown.”  The headline in the online edition is a more subdued “Banking on Venezuela.”)

Venezuela cannot afford to see the flow of dollars dry up. Oil accounts for 80 percent of Venezuela’s export revenue and there are signs that production is dropping.

The country’s need for foreign capital “perversely” might provide reassurance for international investors, the Journal notes.

Barclays Capital likes the 2027 bonds of the state-owned oil company, PDVSA, trading at 41.77 cents on the dollar and yielding 14.73 percent. The 2027 bonds are one of the emerging market’s most-traded bonds, Reuters reports; Credit Suisse likes the 2017 bonds, which are among the emerging market’s most traded debt securities.

The United States also relies on Venezuela. Mr. Chavez’s government supplies 11 percent of our imported oil and PDVSA owns five U.S. refineries.

If that oil suddenly stopped flowing, prices would shoot up. In the time it took to rebalance global supplies, the U.S. GDP would shrink by about $23 billion, according to a 2006 GAO study.

Chavez may say he doesn’t like the free market, but it’s U.S. petro-dollars that are keeping his “revolution” alive.